Subscribe to RSSCouncil Told Find $12.3m For Rail
Auckland Council was this afternoon asked to find an additional $12.3m for 2011/12 because of the unanticipated costs for Auckland’s rail services, triggered by the transport minister’s complaint Auckland is $30m short (Steven Joyce’s letter tot the Mayor in full here. )
This amid talk this afternoon of a 9% rates rise being needed - but Mayor Len Brown said his rates target for 2011-12 was a maximum of 4.9%.
BROWN: Keep rate increase to 4.9%
The council’s strategy and finance meeting was told some of these costs will be funded by NZTA - but passengers will have to cough up more as train fares will be increased.
The minister has blamed the increased costs on “previously unbudgeted operating costs of new electric vehicles and a sharp increase in track access charges from KiwiRail.”
Provisional estimates indicated Auckland Transport will be seeking additional Auckland Council funding of $12.3 million in 2011/2012, and higher amounts over the next 10 years (peaking at $23.7 million in 2013/14).
A report from council officers also revealed that as part of the budget review process, Auckland Transport have indicated “potential cost pressures from a number of unbudgeted political initiatives that have been indicated to them.”
These are set out in the table below.
The ATA had indicated a rate rise of 7.3& would be required without savings and council officers then revised that to 9% as the result of factors such as those increased government rail charges.
But they indicated savings associated with organisational savings and capital expenditure timing issues could reduce that to 5.8%.
But Len Brown said he wants extra savings of at least $13m to reduce the rates increase to a maximum of 4.9%.
“We have already identified millions of dollars in savings and will be looking for more efficiencies. This increase represents a responsible and sustainable rating level given amalgamation and extra unbudgeted costs,” says Len Brown.
Council officers who undertook a high level review of the 2011/2012 budgets included in
the long-term plan identified:
• The inflation assumption should be increased from an average of 3% to 3.4%
• The growth in the ratepayer base assumption should be revised down from 1.3% to 1%
• Additional funding is required to meet unanticipated costs for rail services ($12.3 million)
and a reforecast in dividend from council’s investment in Auckland Airport ($683,000)
• Savings of $777,000.
The review also identified that the planned capital expenditure programme for 2010/2011 and 2011/2012 exceeds the amount delivered in recent years by the previous councils and that this is highly unlikely to be achieved.
“In the time available, management have not been able to identify specific projects that will not be delivered in this period. Consequently, if the draft plan is to reflect more realistic projections of capital expenditure, it will need to incorporate assumptions on timing adjustments based on the results of modelling rather than specific project deferrals.
“Based on preliminary modelling, officers estimate that this would reduce rates by $20.7m in 2011/2012.
In addition to the savings outlined above, the executive team have a programme underway to identify productivity improvements including efficiency savings. Any savings achieved from this programme would help build capacity for new initiatives or a lower rates increase.
Whilst these savings are unlikely to be quantified in time for adoption of the draft annual plan, management believe it would be reasonable to include a target of $2m (equivalent to 1.5% of rates) in the 2011/2012 draft annual plan.
That review said that if those changes proposed above by officers were agreed, the projected rates increase would be 5.85% but that was still too high for Mayor Brown.
9 Comments
Hey, I have an idea: Let Rodney Hide pay the costs of setting up Auckland Council out of the ACT coffers, and let Steven Joyce pay the extra track charges from National’s party budget. That would be the best and most “user pays” allocation.
Because, hey, they use Auckland however they like. But no longer. Len Brown isn’t isn’t going to let himself be blamed for their tricks.
Given that its cost is closest to the shortfall figure going by the above table, I wonder if Parnell is going to get the chop?
I’m getting really annoyed that the games the NACT govt are playing with auckland, esp now their chosen man has lost.
Rodney is clealy trying to force his own agenda onto local govt in Auckland.
Rodney was the one pushing the super-city as a rate saving argument, now that isnt working he is trying to blame Len Brown and make it look like it is all his fault.
Would be a shame if the rail station upgrades were out on hold but but that is probably the least worst thing they can do.
Andrew - the thing is Parnells costs could probably be almost halved if they put it in the right spot, part of the problem is the ARC and Mike Lee in particular are set on having the station by the mainline steam site so much of the cost is in regrading about 1km of track. If they moved it just a bit further north this would mean less track to regrade as that area is flatter and the station would provide better access to the surrounding area.
Bloodly hell put the holiday highway on hold for f-ing sakes and prioritize on things we need RIGHT NOW.
I pray Len Brown hides his ground against those bullies in Wellington.
How much are Wellington paying towards their upgrades and maintenance?
Auckland should pay the same percentage, NO MORE!
Auckland , and the rest of NZ, have been subsidising Wellington’s transport for years.
Living in Wales I’m not 100% how train fares are collected in Auckland but reading between the lines I get the impression that a lot of fare dodging goes on.
Has there been a concerted effort to sort this as or would bring in more revenue and boost rail stats further hopefully negating the main issue slightly.
NOTE: If gates at train stations aren’t installed with the release of an Auckland snapper, I don’t think things will change much rep fares.
@Martin - I don’t think there’s very much fare dodging going on and they’ve on occasion done spot checks of everyone leaving Britomart without catching all that many people.
How about cutting back some of that 300 million in new road building that Auckland Transport plans in the next 8 months.
http://transportblog.co.nz/2010/12/10/300m-on-new-roads-in-eight-months/